As development proceeds, inductive cues must be appropriately interpreted by competent tissues for cell specification to occur. While key inductive factors and the signaling pathways within competent cells are fairly well-described, there remains a major deficit in understanding mechanisms by which tissues lose competence, the ability to respond to inductive signals. The proposed studies will provide insight into mechanisms of cell fate specification, central principles of developmental biology and the key to understanding the origins of many diseases including congenital diseases as well as cancers. Additionally, defining mechanisms by which cells lose competence will contribute to the field of cellular reprogramming and regenerative medicine, as it will provide novel targets for redirecting cell identity. I will study loss of competence initially by using the model of Wnt signaling, the earliest inductive signal required in dorsal-ventral specification in Xenopus laevis. Localized activation of Wnt signaling during the cleavage stage in Xenopus laevis leads to dorsal development1. However, competence to respond to Wnt signaling and induce dorsal development is lost by the midblastula stage. During dorsal-ventral specification, loss of competence to Wnt signaling appears to occur at the level of Wnt target gene promoters, specifically at or downstream of Tcf3, a DNA-binding factor that mediates transcription of Wnt target genes2. Therefore, I hypothesize that loss of competence is mediated by Tcf-grg complexes at the promoter of Wnt target genes. Specifically, I predict that the co-repressor Grg4 is required to establish loss of competence. In the absence of Wnt signaling, Grg4 binds Tcf3 and represses transcription of Wnt target genes, through recruitment of a histone deacetylase3. In cells contributing to future ventral and lateral mesoderm, Tcf3 represses transcription of dorsal Wnt target genes through recruitment of Grg43. In Aim 1, I will determine whether the corepressor grg4 and its associated HDAC are required for loss of competence. In addition to investigating two independent possible regulators, I will test whether together they form a mechanism for loss of competence. Because groucho proteins interact with many inductive signaling pathways, testing the role of groucho is particularly important as it may provide a key for a more general mechanism of loss of competence. In Aim 2, structure-function experiments will elucidate Tcf3's role in establishing loss of competence. Specifically, I will determine whether Tcf3 corepressor-binding domains are required to establish loss of competence. Furthermore, I will use reporters regulated by Tcf to test the sufficiency of Tcf-binding sites for loss of competence. Together, these experiments will establish whether loss of competence is mediated by a Tcf3-Grg4 complex at the Wnt target promoter. Generally, I will address how tissues lose their ability to respond to inductive signals during development.